STOCKS
Dow (21637.74, +0.39%) has closed above 21600, breaking a major long term resistance and in case it holds, we could see the rally to continue towards 22000 which could be an immediate resistance. A small dip from 22000 is possible before it resumes its rally towards 22500 and higher in the longer run.
Dax (12631.72, -0.08%) rose sharply last week and could possibly continue towards 12750-12800 before again coming back towards current levels. Near term looks bullish.
There have been some talks of concern over tightening of financial regulations. Shanghai (3189.48, -1.02%) fell to levels near 3139 in the morning trade before again recovering to levels near 3190. Immediate support is seen near 3170 which if holds could keep the prices higher for the coming sessions. A bounce back towards 3200 and higher is on the cards for the near term.
Nikkei (20118.86, +0.09%) needs to bounce back from current levels to move up towards 20300 and higher; else a break below 20000 is possible initiating fall over the coming sessions. For now our preferred view is to see a bounce towards 20300.
Nifty (9886.35, -0.05%) has scope of moving up towards 10000 in the coming sessions before it comes down to 9800. Near term looks bullish.
COMMODITIES
Recent weakness in Dollar index (94.95) has impacted positively across all the commodities. Gold (1231) has managed to break its recent short term down trend channel and hovering around its crucial resistance of 1232. A close above that could open up 1245 and 1258 levels respectively. Silver (16.02) is still within its downward channel though there are chances of a upside rally towards 16.54 regions.
Copper (2.69) moved marginally higher within the trading range of 2.66-2.78. We have been bullish on copper since 22nd of June and we will remain so while it is trading above 2.55 levels. A close above 2.78 regions could open up 2.85 levels as well.
The energy pack had closed higher and it might remain stable while above 47.70 (Brent) and 45 (WTI) respectively. Most factors are supportive for oil at the moment. These Supports has held on weekly basis and Brent (49.06) and WTI (46.67) has moved up in line with our expectation. We think some more rises towards 51.20 and 47.70 is possible within a couple of days.
For the near term, Brent and WTI seems to be trading in a 47-51 and 45-48 range now and the medium term ranges are now 44-52 and 42-50. The big question is whether we will see a rise past 52 (Brent) and 50 (WTI) or not by the end of July and to get a clue on that, we will keep an eye on U.S Weekly crude oil inventories. But we will remain bullish in near term while Brent and WTI are trading above 47 and 45 regions on an closing basis.
FOREX
Weak US economic data increased the doubt over any further Fed rate hike this year and kept the pressure on Dollar unchanged.
Dollar Index (95.18) has broken below the support of 95.50-40 in line with expectations and now much lower levels of 94.00 comes into consideration. The trend remains firmly down with 96.50 as a major resistance in the near term.
Euro (1.1462) has broken above its immediate resistance of 1.1440 on the back of the strengthening German 30Yr yields as discussed last week. Cautious stance is recommended in the long term resistance zone of 1.1500-1.1600 despite the firm uptrend till now.
Dollar-Yen (112.63) failed to hold above 112.65 and weakened further. The current correction may extend to 111.50-00 if 112.30 is unable to hold. With other majors in a firm footing, the chances of seeing 111.50-00 look stronger.
Aussie (0.7815) has seen a major breakout as it tested the 15-month high of 0.7835. If it can sustain above 0.7700 in the any correction in the next few sessions and the breakout doesn’t turn out to be a false one, then it can be taken as a long term shift to the bullish side and the immediate target would be 0.8150-75.
Pound (1.3101) had a similar major breakout above the resistance zone of 1.3030-50 to register a 10-month high and now may rise towards 1.32 and later, 1.34.
Dollar-Rupee (64.45) closed absolutely flat in the last session but our view remains unchanged as we look forward to 64.20 being tested this week on a break below 64.40-35.
INTEREST RATES
The US yields are almost stable. Note that they are all trading below crucial long term resistances and could be bearish for the medium term. The 10-5YR (0.46%) could face some rejection from 0.4625% and could come off in the next few sessions.
The UK yields have started to rise again and look bullish for the current week. The 10YR (1.31%) could move up towards 1.40% while the 30Yr (1.83%) and the 5YR (0.69%) can move up towards 1.90% and 0.75% respectively.
The UK 10-5Yr (0.62%) is testing resistance near current levels and if that holds, a corrective fall is possible in the coming sessions.
The German yields are trying to rise and could move up slowly in the coming sessions.
